Medical malpractice reform

One of the more conciliatory overtures (alternated between more partisan sniping) the president made in his address to Congress was on the topic of medical malpractice tort reform.

I don’t believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs. So I am proposing that we move forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine. I know that the Bush administration considered authorizing demonstration projects in individual states to test these issues. It’s a good idea, and I am directing my secretary of health and human services to move forward on this initiative today.

Whether this is will amount to anything is, of course, an open question. But I think the president is genuinely interested in pursuing malpractice reform as a compromise. Mainly because he’s a pragmatist and, well, it makes sense.

Because part of the reason victims of malpractice are awarded sums of money that can be catastrophic for physicians (thus leading physicians to practice defensive medicine and carry large amounts of insurance) is not just for the suffering they’ve experienced. It’s to pay for the increased medical costs they may face in the future, for the rest of their lives. If medical care is more affordable and accessible, that rationale for extremely large monetary awards dries up.

That doesn’t mean there isn’t a place for punitive damages or recompense for suffering. There is. But some kind of cap on those damages should be much more palatable in a society wherein a malpractice-related injury or illness doesn’t price you out of the insurance market, or make you uninsurable, thus putting you on the hook for potentially millions of dollars in medical bills for the forseeable future.

Some numbers

Compiled from the World Health Organization’s website.

Nation	USA	Canada	United Kingdom	Japan	Uganda
Total Population	302,841,000	32,577,000	60,512,000	127,953,000	29,889,000
Gross nat’l income per capita	$44,070	$36,280	$33,650	$32,840	$880
Life expectancy at birth m/f	75/80 yrs	78/83 yrs	77/81 yrs	79/86 yrs	49/51 yrs
Probability of dying under 5*	8	6	6	4	134
Total expenditure on health per capita	$6,714	$3,672	$2,784	$2,514	$143
Expenditure on health as % of GDP	15.3	10	8.4	7.9	7.2
*per 1,000 live births

A few comments:

1. I picked the nations somewhat randomly, including Uganda just so we Westerners can all be reminded how fortunate we are.
2. The U.S. is very large, which gives us unique challenges.
3. What’s good for the goose isn’t necessarily good for the iguana. I’m not suggesting we can unthoughtfully mimic other countries’ approaches to healthcare and automatically get the same results.
4. Nonetheless, despite making more money than the British or Japanese, we are paying twice as much for, at best, comparable outcomes.

Crisis of Abundance

…is the title of a book by Arnold Kling. It is available at Davis Library at UNC, but only costs $9.95 on Amazon.

He maintains that there is a trade-off among the following:

1. insulating consumers from costs
2. giving them free choice of medical services
3. holding down costs

meaning that you can’t have all three. I think he is basically correct though I don’t think each is a boolean choice; there are shades of grey.

Virtually every society on earth has chosen #1, including the US. The US has also chosen #2 in spades, and thus is completely missing #3.

Most government run plans provide #1 and #3. Sometimes you can change the structure of the cost from a dollar outlay to a time outlay (i.e. waiting in line) which makes dollar cost seem lower. Google the “NICE” outfit in the UK. I forget what the acronym stands for, but they are basically the group that chooses what is covered and what isn’t. Massachusetts is trying to cap prices.

While I am hoping for a solution to loosen #1 to allow us to get much more of #2 and #3, I’m having some doubts about our ability culturally to change that much. And when I speak of “insulation” I primarily mean seeing the cost – i.e. these high deductible plans with cash provided by employer or governemnt to cover it with incentive to spend less and therefore price compare/shop around.

But I think, culturally, we have an aversion to “paying” directly for health care. It seems ugly or something. So, I am perhaps growing more resigned to a ‘public school’ type of model where there is relative security of borderline crappy coverage for all with its own new set of problems, while those that can afford it do and get better private coverage.